As mentioned in last week’s newsletter, the main indices remain inside areas of consolidation. As we have previously observed, price never moves in a straight line, and following the bullish moves of March and April, price is currently taking a breather before its next move.
This is where successful investors and traders exercise patience. The discipline to wait and then act on the next move will often be rewarded with opportunities to compound existing positions.
Looking at the indices:
- The S&P 500 found support at the daily 50sma and has since moved above the 20sma.
- The Nasdaq 100 found support at the high of last year and has moved above the 20sma and 50sma.
- The Dow 30 found support at the daily 50sma and has moved above the 20sma.
- The FTSE 100 found support at the high of January 2021 and continues to track the 20sma.
Since last week’s pullback across the indices, we have seen a bounce and a move back to the upside with confirmed recoveries of between 2% and 5%, depending on which of the indices you look at. What is common is that we need to see breakouts across the board for price to confirm a continuation of the long-term bull trend. As mentioned, this is where patience comes in, and the rewards often follow.
We continue to hold a number of stocks in our portfolio, which we will add to on the next round of breakouts. Good opportunities continue to present themselves, which allows us to diversify further.
Let’s get into this week’s newsletter!
Here is how the best performing UK & US stocks, as picked out by our scanning process, have
performed this week.
For a glossary of terms click here.
OUTPERFORMING STOCKS COVERED THIS WEEK
UK Stocks
US Stocks
FTSE 100
The FTSE is forming a tight range, and May continues to produce an indecision candle on the monthly timeframe. The 2015 Piv9 level continues to hold strong as resistance whilst the weekly 200sma is holding strong as support, with the 7000 round number sandwiched between these two key levels. There is little surprise that price is currently consolidating in this zonal area.
On the weekly timeframe, the Sublime trend filter continues to remain green, with price being supported by the 200sma.
On the daily timeframe below, we can see the consolidation price has been in this week, moving above and then testing the 20sma on several occasions. The Sublime trend filter is currently green after alternating between green and grey, reflecting the recent consolidation area. Price remains above the 50sma, along with immediate support from January and the 200sma. Our bias overall remains bullish, and we continue to look for stocks outperforming the index.
UK STOCKS
Ashtead Group - AHT
A stock we have been following for several months, AHT has shown the power of trend trading as it continues to go from strength to strength.
An 11% bullish move in May followed strong moves in March and April. Price has moved over 80% since the breakout in November 2020.
The weekly timeframe sees price maintaining the linear, bullish trend with price trading above the 50sma and 200sma. The Sublime trend filter remains green.
On the daily timeframe below, price continues to trade above the 20sma, 50sma and the 200sma with all 3 MAs angling up, confirming a bull trend. In the past two weeks, price has closed above the £50 round number and this week retested that level as support, which is to be expected. A trend continuation will be confirmed with a breakout beyond the ATH. We will continue to update our Phoenix members with any signals in this high performing stock.
Big Yellow Group - BYG
A very strong move in May with price moving 9% so far which has taken price out of consolidation it had been in since February last year and onto new ATHs. Price is now likely to target the £20 round number. This stock has a history of trending, but it can swing and create deeper than desired pullbacks.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green, confirming the emergence of a bull trend.
On the daily timeframe below, price is trading above the 20sma, 50sma and 200sma and the Sublime trend filter is also green. After breaking out from consolidation on 10th May, price retested the resistance-turned-support level, which is to be expected. Price has now moved beyond the previous pivot resistance to create an ATH. With earnings now out of the way, we expect the bull trend to resume, and we will share any signals with our Phoenix members. This is a stock to watch but not one that is high on our watchlist for now, given its history of performance.
Games Workshop Group - GAW
Price has been very bullish in May, with an increase of over 10%. Whilst this stock recently experienced a deep pullback, it is now showing signs of a potential breakout.
On the weekly timeframe, price is still above the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily timeframe below, price is above the 20sma, 50sma and the 200sma and the Sublime trend filter is also green, confirming alignment with the weekly timeframe and between the MAs. If price can break and close above the previous year high and momentum can continue, we could see a long-term trend develop. A good opportunity for our Phoenix members to put on their watchlist.
If you have watched the 4-part series and are keen to get started, then book yourself in for a 1-2-1 call with a member of the Sublime Trading team. |
S&P 500
During the earlier part of May price experienced a 3.8% pullback, but price has since recovered and is now within 1% of the ATH. The strength at the moment lies with the bulls, who seek to continue the long-term bull trend in play since 2009. A break above the ATH is likely to see price ascend towards $5000.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily timeframe, the index continues to trend well, using the 50sma as support. The overall bias remains bullish with price trading above the 200sma. After last week’s pullback hit the 50sma, price has since bounced and is now trading above the 20sma. We now need to see price hold above the 20sma and then go on to create new ATHs above $4238, which is the current ATH made on May 7th 2021.
US STOCKS
American Express - AXP
Price is in a strong overall uptrend. During May price has increased by circa 4%, which has included recovery from a pullback. Price has not moved around 16% since clearing the high of 2020.
On the weekly timeframe, price is trading above the 50sma, and the 200sma and the Sublime trend filter is green, confirming a bull trend is emerging from the breakout.
On the daily timeframe below, we can see price is above the 20sma, the 50sma and 200sma and the Sublime trend filter is green. Since breaking out of consolidation, price has been using the 20sma and 50sma as support. A break and close above the recent high at $160 will confirm a trend continuation towards $200. We will continue to share signals with our Phoenix members.
Brookfield Asset Management - BAM
Another stock that has performed exceptionally well in May with a 9% increase, resulting in a new ATH. The history of this stock looks promising as there are several strong trends in its past where price has sustained a trend for several years.
On the weekly timeframe, price is above both the 50sma and the 200sma and the Sublime trend filter is green. Since price cleared the previous year high at $45.50 price has shown bullishness.
On the daily timeframe below, price is now trading out of consolidation and above the 20sma, 50sma and 200sma, whilst the Sublime trend filter is green. Thursday’s price action saw a break and close above $50, an important level to see as support for a bull trend continuation. We will now share the relevant pullback and breakout signals with our Phoenix members.
Extra Space Storage - EXP
A stock with an excellent history of performance. During May price moved down some 4% from its ATH to then reverse in the latter part of the month, to close within 1% of its ATH. This follows an extremely strong impulse move between February to April where price increased by 29%.
On the weekly timeframe, price continues to trade above the 50sma and the 200sma. The Sublime trend filter remains green.
On the daily timeframe below, in the past week price has moved beyond the 20sma and is also above the 50sma and 200sma. The Sublime trend filter remains green. Price has mainly been using the 20sma as support. Price has recently paused at the $150 round number which is to be expected. A breakout from this zonal area and price is likely to target the $200 round number as the next area of resistance above price. Several breakout signals have already been shared with our Phoenix members.
Facebook - FB
A 25% move between March and April took price out of consolidation, above $300 and onto new ATHs. In May price retested the previous year’s high at £305 and has since made a new ATH, in turn demonstrating the bullishness of this stock.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green, confirming an emerging bull trend is in play.
On the daily timeframe below, price is trading above the 20sma, 50sma and 200sma. Price has been using the area between the 20sma and 50sma as support and since March 2021, it is making higher highs and higher lows. Phoenix members will be particularly interested in this week’s new ATH as this will allow us to share signals going forward.
Fortinet - FTNT
This stock continues to go from strength to strength. The current trend started in February this year having moved up 47%. Whilst in May, price continues the move with an increase of over 4% and a new ATH.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
The daily timeframe below shows a strong trend is in play. The structure of the trend is made up of higher highs and higher lows, with modest pullbacks finding support between the 20sma and 50sma. The most recent pullback found support at the MAs and around the $200 RN. Price remains above the MAs and this week printed a new ATH. Phoenix members will add compounds to existing positions as this strong trend continues.
Life Storage - LSI
This stock has a history of sustained trends running for multiple years. A very strong April where price moved up by 11% has been followed up in May with a further increase in price in excess of 2%, including a pullback recovery.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
The daily timeframe below shows that price is above the 20sma, 50sma and 200sma, and all MAs are angling up demonstrating a strong trend is in play. The Sublime trend filter remains green. Since the breakout above the previous year’s high at $80, price has consistently made higher highs and higher lows, using the zonal area between the 20sma and 50sma as support. Price is now confronted with the $100 round number, which will act as resistance. Phoenix members will be closely watching this stock for a breakout beyond the $100 round number.
West Pharmaceutical Services - WST
With a long history of trends, this stock shows strong signs of a new, long-term trend emerging. Following a period of consolidation between August 2020 to March 2021 price has since made an impulsive move, with April seeing a 15% increase whilst May has continued this move with a further increase of over 4%.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily timeframe below, price is above the 20sma, the 50sma and the 200sma and all MAs are aligned and angling up, with a clear trend in place. Price recently found support at the 20sma and has since created an ATH. Phoenix members have a position in this stock and will look to compound as opportunities present themselves.
The market continues to recover well but we still await a breakout on the indices. The closing price of the week will tell us more. Stay up to date with market events by joining our FREE Launchpad Facebook group.
Keep it simple. Keep it Sublime.
The ST Team
